Category Personal Finance

If you die without a Will, the law says that you have died “intestate,” which means that you left no instructions as to how your property is to be divided and distributed. In these circumstances, this article will show you how your property will be distributed to your surviving relatives or your wife and children. Even if you want your property divided according to provincial law, you should still have a Will because it will reduce delays and expenses involved in wrapping up your affairs.

What is a Will?

A Will often called a “Living Trust,” is a legal document that dictates how your property is to be divided after your death. Some people choose to make a Will for their own benefit while others may use their Will to transfer property to their spouse, children, or a charity. It is also a common practice to name someone to act on your behalf as an “Administrator of the Estate.” This person is responsible for the proper execution of your Will. It is important to specify in the Will who will be appointed as the Administrator because this person will be the only person authorized to distribute your property according to provincial law and estate laws in the province or territory in which you lived.

Why do people make Wills?

People sometimes make Wills for the following reasons: They want to be sure that they and their family members are legally protected from possible lawsuits from other family members (or even themselves) that could arise from any potential estate disagreements. They might have young children who are minors, or they may have a spouse or child who is incapacitated, mentally disabled, or who is ill and might die within a short period of time. They might have parents or other adult relatives who are facing financial problems, or they might be senior citizens. They might have some reason or other that might have to be considered by the courts regarding their property.

Problems that arise when someone dies without a Will

If someone dies without a Will, the law doesn’t have much say about how the property should be divided. While there are provincial laws that spell out the types of property that should be distributed according to provincial law, the law doesn’t really spell out how it should be done. It does say that the only factor in deciding how the property should be distributed is whether the deceased person intended it to be distributed according to provincial law or on the understanding of a personal representative. So here are some of the questions that might arise if someone dies without a Will: Does the property have to be divided in the order in which the deceased owned it? The answer to this question depends on the date of death.

What Exactly Happens If I Die Without A Will?

Here are some key points that you need to know about how your property will be distributed if you die without a Will: Unless you have a surviving spouse or dependent children, your property will be divided equally among your four remaining living children and your surviving spouse or dependent children. Your surviving spouse or dependent children can’t have any other children before your death, but they can have other spouses, boyfriends, or girlfriends after you die. This is a result of the “step-up” provision, which allows surviving spouses to keep certain property that they had earlier inherited from you. You can inherit a piece of property outright, and it will be distributed equally among your heirs, without a Will.

This post contains affiliate links. Please please read my Disclaimer for more information

What Exactly Happens If I Die Without A Will?

Here are some key points that you need to know about how your property will be distributed if you die without a Will: Unless you have a surviving spouse or dependent children, your property will be divided equally among your four remaining living children and your surviving spouse or dependent children. Your surviving spouse or dependent children can’t have any other children before your death, but they can have other spouses, boyfriends, or girlfriends after you die. This is a result of the “step-up” provision, which allows surviving spouses to keep certain property that they had earlier inherited from you. You can inherit a piece of property outright, and it will be distributed equally among your heirs, without a Will.

Who Will Be In Charge Of My Estate?

The law allows each province or territory to choose to handle the distribution of your property. Generally, your province or territory will make a recommendation of who will be responsible for your estate if you die without a Will. If you live in a province that is not listed, you should still make a Will. Who Is On My Estate? Each province has a division of wills that is responsible for managing the probate of your estate. In Ontario, the government’s General Division of Wills handles these matters. By registering with the General Division, you appoint them to take care of your estate upon your death. These persons then form the General Division’s executor and administrator. These persons are in charge of organizing your estate and your distribution of your estate.

Who Will Take Care Of My Children?

For many of us, including parents, children are the most significant, cherished family members. It would be shocking if one of these loving children lost everything. In order to address this possibility, you must have a Will. If you don’t have a Will, your property will be divided according to the following provisions: If your spouse dies first, then his/her estate, which includes your children, will be taken care of first, even if you have separate wills. If you have separate wills and your spouse died first, then his/her children will be taken care of first. If you have no children, then the property will go to a designated charity. If you have a minor child, then the child will be left to your spouse, and the minor child will be taken care of first.

Who Will Get My Estate?

There are several ways your family can receive your property. The surviving spouse will inherit the entire estate, including your real estate, personal effects, and remaining money. Your spouse will have the benefit of your remaining income tax-free until you are buried or cremated. You can tell the decedent to set up a living trust so that the spouse will be named as the beneficiary in your Will. Even if you have children who are no surviving children, they can be named as beneficiaries under a living trust because children are considered legal persons for the purposes of intestate succession. Even if you don’t have any children who are now living, you still may want to have your estate divided equally among your children after you die.

What happens if you die intestate?

In the case of intestate deaths, a judge determines how the estate is distributed. Typically, a family court judge will appoint an executor, a person who is appointed to look after the will of a person who died without a Will. An executor is usually a family member or a close friend who will carry out the terms of the will. An executor is often paid to do his or her job, which is usually quite complicated because executors are tasked with doing tasks that most of us would rather not do. The executor will investigate the contents of your estate. They will look into bank accounts, investments, and real estate, as well as a credit union and insurance accounts. An executor can pay your bills and settle your estate without having to go to court.

How to make a Last Will and Testament

If you have not made a Will, you will have to create one in the circumstances described below. Making a Will takes time, and making one in the wrong way can cost you more than it should. The more time you spend on writing it, the better off you are. You can write it in a few hours or even a few days if you work hard, but do not make the mistake of taking a few weeks or months to do it, as that will add more delays to the process. If you do not have a Will, your property will be distributed according to the law of intestacy. This is the law that requires that your property be divided equally among your heirs.

Conclusion

Get a Will done or change your Will to reflect the current law on your property. Not only should you have a Will, but it is very important that you read through the information that this article gives you and be prepared for the eventuality that you might die without one. No one wants to die in a legal limbo; it may be one of the greatest fears of all.

“If you have any feedback about what happens if you die without a will that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Do you want to know what exactly wealth management is in simple terms? How does it benefit you? How does it work? So, if you have these questions in mind, keep up reading this post.

Wealth Management

Wealth management is a holistic approach to wealth creation and sustaining wealth. If you have a wealth management plan and approach in your life, you will reach your financial goals and dreams in life much more easily; you will have better control over your money in the present and future life; you will have more financial independence and security, even in your retirement period.

Wealth management includes four components: 1. Financial life planning; 2. Building capital; 3. Managing capital; 4. Succession planning. 

1. Financial Life planning: some of the wealth management services in this area include:

1.  Life planning gives you more control over life and its expenses.
2. Making sure you have the rainy day fund, lifetime savings, college savings planning, retirement planning, etc.
3. Life planning provides a roadmap to achieve the things you want. It will help you to reassure that you will reach your goals and aspirations.
4. Life planning in wealth management focuses on planning your wealth to meet your life plan.

2. Building capital will cover a number of needs such as:

1.  Investing intelligently, effectively, and timely.
2. Maximizing your capital in the few years of employment and introducing investment vehicles and plans such as target-date funds (TDFs), 401(k), Roth 401(k), Roth IRAs, etc.
3. using tax shelters
4. Providing research-based financial advice to help you decide what to invest in. To help clients get the most from their investment plans, wealth management pros will draw on their market-leading research.
5. Recommend the type of investment journey that suits you well according to your personality, risk tolerance, needs, goals, etc.
6. Managing your portfolio on your behalf, freeing your time for other activities and pursuits in life. Moreover, there will be constant reporting and ongoing communication between financial advisors and their clients.

This post contains affiliate links. Please please read my Disclaimer for more information

3. Managing capital

1. Creating a balance between your income, capital preservation, and capital growth objectives.
2. The management of risk by using diversification strategy or insurance. Investment should be diversified across all assets –i.e., cash, stocks, bonds, equities, and so on.

Why Is Wealth Management Important?

In the lifetime, we may encounter different financial questions and dilemmas. Do I have enough money to retire? Which investing strategy is the best one for me?  How can I maximize my capital? What is the best way to minimize my taxes? And immeasurably more other questions.

If you make a wrong decision based upon false information and advice, it will cost you –and your family members- dearly. Moreover, financial management is very daunting for some people; thus, you should hire a financial advisor or wealth manager.

What do the Wealth Management Professionals do?

Generally, wealth managers take the following actions:

• They talk to their affluent clients to gather specific information and then analyze their unique financial situation. They take the time and effort to understand your household expenses and cash flow, to help you manage your wealth effectively and appropriately. They ask about your tax situation, medical expenses, family expenses, your expectations, and even more personal questions to customize your life and wealth plan. In other words, without building personal relationships with their clients, wealth management professionals will not have an outstanding performance.
• These professionals try to understand their client’s financial needs and goals that matter most to them. They help their clients transition from their current financial situation to where they wish to be.
• Having had good knowledge and expertise in the financial area, they offer advice and recommendations; create a financial plan; help their clients overcome difficult monetary decisions and dilemmas.
• They are very experienced in dealing with large sums of money and managing multiple assets over different accounts.
• They will help you invest your money in securities and investment strategies that will enhance and protect your wealth.
• They improve your portfolio performance by using tools and strategies that enhance your passive income and allocate your assets wisely.
• They are in contact with you to make sure that you stay on track.
• They offer individualized and unique financial services for their clients. To do this in the best possible way, they build long-term relationships with their clients. Wealth management professionals should be at your disposal throughout your life.

Conclusion

On the whole, the question “what is wealth management?” Can be captured by asking yourself what does it mean to live a good life and leave a good legacy? It is all about your financial needs and goals and deals with your life and wealth plan. It may sound easy at first, but the reality is that the financial world is complex and fast-changing, with a wide range of choices available for you.  Therefore, you had better seek a wealth management professional.

Finding the right and trustworthy wealth manager will require some research. In addition, you had better look at the wealth manager’s immediate past performance. You can choose to go to wealth management firms, such as Pillar Wealth Management, JARDEN, and ST. James’s Place.

You should feel comfortable with the advisor you choose; the wealth management advisors should also consider your standards and specific requirements. If you do not see eye to eye with them, this long-term process will be stressful and frustrating and probably will be doomed to failure. Additionally, receiving the best insight and advice from the right and competent wealth management advisor will motivate you to take steps to achieve your life goals and aspirations. The right wealth management advisor will ensure a better future for you and your family.

“If you have any feedback about what is wealth management that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Have you ever thought about the financial well-being of your beloved ones when you pass away? Do you care what will happen to your kids or assets if you die? Yeah, I know these are bitter questions, but they must be asked. Well, will and trust are two legal instruments that can provide you and your family members some peace of mind dealing with these resentful questions and issues. They can help your loved ones avoid potential financial hardship. Indeed, no one knows what the future has in store for us, so it is essential to make your estate plan.

What Is a Will?

A will is an official legal document that declares one’s wishes for his/her money and property after death. It guarantees that your money and assets will pass to your intended inheritors.

Five Reasons You Should Have a Will:

1. If you do not have a will, the law will decide upon the distribution of your money and property; and this can be contrary to your wishes. However, if you have a will, there is a better chance of getting things to happen in the way you want.
2.  If you don’t have a will, the distribution of your estate (money, property, possession, and all these things together called your ‘estate’) will be time-consuming, costly, burdensome, and nerve-racking.
3.  It can reduce the amount of inheritance tax.
4. You can also use it to tell people about your other wishes, e.g., about how and where you want to be buried.
5.  In your will, you can choose a guardian for your minor children. Moreover, if you have a pet that you love, like your own child, you can ensure that someone takes care of your pet after your death.

What Is a Trust?

A trust is a legal relationship in which one party (known as a trustor or grantor) gives another party (a trustee) the right to the ownership of a property or assets for the benefit of a third party (i.e., the beneficiary).

Two Basic Types of Trust:

1.  Revocable (or living) Trusts can be changed by the grantor. Usually, a revocable trust turns into an irrevocable trust after the death of the grantor.
2.  Irrevocable Trusts cannot be changed or modified.

What Is the Difference Between a Will and Trust?

1.  The most important difference between will and trust is the way the estate is held. When you write a will, you mention the name of heirs or beneficiaries together with the property that they will receive. In a trust, you also name your beneficiaries along with the property they are to receive, but the property must be transferred into the trust for their benefit.

*Now, you may ask that what is the difference between an heir and a beneficiary? Though people use these two terms interchangeably, there are differences between them:

This post contains affiliate links. Please please read my Disclaimer for more information

 An heir: a person who is related to the deceased by blood; it also includes a spouse.

A beneficiary: one whose name is explicitly mentioned in a will, trust, or insurance policy to receive property or financial assets. A beneficiary can be not an heir; for example, a friend, a long-term but unmarried partner, ex-spouse, a stepchild, a charity, or even a pet can be a beneficiary.

If a person dies with no will or trust, it is usually heirs who inherit assets, including one’s spouse and children, and in some cases, his/her parents or siblings.

2. The second difference between will and trust is probate. Probate is the official and legal proving of a will. This process varies according to place and situation, but generally, it is very time-consuming, expensive, and controversial. A living trust does not pass through probate, while a will can. In other words, trust helps avoid probate.

3. A will can be contested and challenged in the court, but a trust can not. In other words, will have a contentious nature.

4. Unlike a will, a living trust goes into effect once you create and sign it; while you are still alive. But, a will can be effective only after your death.

5. In a trust, you can not choose a guardian for your minor children, but in a will, you can do this.

6.  Trust gives you more control over the distribution of assets and property.
Put differently, trusts give more control over when and how your assets are distributed.

7.  There are different forms and types of trust.

8. Creating a will is much easier and less expensive than a trust.

Should I have a Will or Trust? Which One Is Better?

Choosing between a will and trust is a personal choice, and it depends on many personal factors (though some attorneys recommend having both; because each one has a different and separate function). Overall, to answer this question correctly and appropriately, you have to assess your situation, your goals, and needs at the very beginning of this process.

If you have minor kids and want to choose a guardian for them after your death, you must have a will.

• If you have an heir or beneficiary who is underage or has a mental disability (i.e., one who is unable to manage finances), setting up a trust is a good choice.
• Four Online Legal Services for Making a Will or Trust:
• LegalZoom: A simple trust done online with LegalZoom costs less than $300
• Nolo’s Quicken WillMaker & Trust
• Trust & Will
• Wiling

Conclusion

If you want to make an estate plan, it is a good idea to consult an attorney first. They have good expertise to offer assistance and answer your specific questions. Remember that having both a will and a trust is a true gift for your family members and friends, showing your care and love for them.

“If you have any feedback about the importance of will and trust that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Transportation costs for many people worldwide are between the biggest expenses, maybe greater than housing and even food. Only a few people are lucky to live near to work, schools, shops, so can walk to their destination. However, your transportation costs should not squeeze your monthly budget. Fortunately, there are many ways to save money on transportation.

How to save money on your transportation costs

1. Walk

Many people use the car even for short distances, and walk only because parked their car. A study from the University of Glasgow showed that people of different ages rather drive than walk for distances greater than 15-minute by walk, specifically in the situation that they have a car and parking space is easily accessible.

Walking is free and also available to everyone in most places. Walking, besides saving money compare with automobile trips is an easy way and the cheapest one to achieve good health. While walking people can see the circumstances and can also think.

2. Replace Cars with Bicycles

Many countries encourage people to ride a bicycle and open certain lanes for bicycling. Walking or pedaling a bike, in addition to saving money, creates significant notable health benefits. Although, regarding the costs, time, and safety considerations of biking, ride a bike is not possible for everyone.

3. Public Transportation

The expenses of operating a small car, including maintenance, fuel, and parking, can be more than the food budget of many families. In case you do not want to give away the automobile completely, you can replace it with public transportation. Small cities often provide scheduled bus services, and big cities combine bus services, rapid light rail, and commuter rail systems that are vast and cheap. Many of the public transportation systems set space for passengers to load their bikes for short-distance trips.

The average travelers can save $770 each month while self-serve, regular gasoline costs $2.75 per gallon and the monthly reserved parking space in a city center is about $155, the American Public Transportation Association said.

4. Share Rides

Before owning two cars in the same family become universal, sharing rides between neighbors was common. When people are traveling to or from the same place, carpooling is a great choice. Even in a location where using a car is necessary, you do not have to ride your car. Parents who pick up kids at school can manage to share the trip with other parents. The expenses will be split by drivers and cars or by passengers giving an agreed amount of money for travel.

This post contains affiliate links. Please please read my Disclaimer for more information

5.  Rent a Car Only for Special Occasions

Renting is often the most inexpensive way when you need a car just temporarily. Many people who are living in big cities rent cars for vacation trips or weekends away from the city. Rental companies often suggest special deals to attract more customers. Attention to their tricks in adding extra costs for car renting without customer recognition.

6. Reduce the Retail Price of an Automobile Purchase

While cutting the costs of automobile ownership, notice the following:

• One car ends up cheaper than two. Besides savings on the operating expenses such as maintenance and fuel, there are saving on insurance, licensing, depreciation, and interest charges on each loan to buy a car. There are advantages and disadvantages of having one car in a family, including the feasibility of saving hundreds or thousands of dollars each year.
• Small models are cheaper than large models. The expenses of owning a Ford Focus or Honda Civic are $4,548 per year, while the expenses of owning a larger Buick LaCrosse or Ford Taurus is $7,620 annually, the American Automobile Association (AAA) calculated.
•  Purchasing and operating a second-hand car is cheaper than a brand new one. The car that we drive, for some people, is satisfying some needs more than a safe, reliable, and inexpensive ride. Some individuals consider an automobile as a personal brand. Financial executives, for instance, often drive Cadillacs or expensive foreign cars. However, for many people car is just a vehicle to transport them from a place to another. For such people purchasing a used car in good condition can be a better option rather than buying a brand new car.
• Finding a car at a fair price. Some people use a car buying online service to buy a car; in this way, in addition to saving money and time, they will avoid bargaining with an aggressive car salesperson.

7. Save on Auto Insurance

One of the biggest costs for car owners is automobile insurance. According to the rules of most states, all drivers need to carry liability insurance to protect the public, and most lenders need comprehensive and collision insurance until their loan is repaid. The following steps help you to reduce your insurance expense without breaking the law or notably elevating your financial exposure:

• Choose your car make and model wisely. Insurance premiums for those models with high horsepower, high repair costs, and most possibly to be stolen are higher than the premium for a car with moderate horsepowers like a sedan or station wagon.
• Knowing the factors that impact your premium rate. Several factors affect car insurance. Try to manage those factors to reduce your premium and pay less.
• Review the insurance coverage. Various automobile insurance coverages are available including collision, comprehensive, gap, and liability. Sometimes you do not need all the coverages; for instance, comprehensive and collision insurance might be necessary on an old car.
• Pick higher deductibles. In case of a car accident, a higher deductible means a higher out-of-pocket cost. Good drivers select a $500 deductible over a $200 deductible and will save 15-30% in the collision and comprehensive insurance premium each year.
• Request discounts. Remember to utilize car insurance discounts for good drivers. Drivers who take courses in defensive driving or refresher driver training course qualify for a discount.

Conclusion

Overall, transportation expenses are among the most expensive things that families have to pay for. By reading this article you learn a lot of ways to save money around transportation costs. Take care of small or big changes that you can make in your transportation methods to keep more money in your bank account.

“If you have any feedback about how to save money on transportation that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

To do estate planning doesn’t have to be rich; in fact, everyone needs some degree of estate planning. The estate includes everything someone owns and can be in any size, which is why it can be worth taking time to plan for what happens to it. Estate plans should be created for the particular needs of the individual.

The estate plan checklist provided in the current article will explain various types of estate planning documents, and assist you to evaluate those that will be valuable to you.

Even if you plan to hire an estate planning attorney, still you need to have a basic knowledge of what is involved.

Six steps to basic estate planning

1. Inventory your stuff

Maybe you think that you do not have that many assets to justify estate planning. However, when you begin to look around, you will get astonished by all the tangible and intangible assets you have.

The tangible properties in an estate can be including:

• Homes, lands, and other real estates
• Cars, motorcycles, and boat as well as other vehicles
• Collectible objects like art, coins, antiques, and trading cards
• Other personal properties

The intangible assets in an estate can be including:

• Bank accounts like checking and savings accounts and certificates of deposit
• Mutual funds, bonds, and stocks
• Health saving accounts
• Life insurance policies
• Retirement plans like individual retirement accounts and workplace 401(k) plans
• Ownership in a business

At the moment that you make a list of your tangible and intangible assets, you should calculate their value. An outside valuation can help for some assets such as:

• § Statements from your financial accounts
• § Recent appraisals of your home

In the lack of outside valuation, value your assets based on how you expect your inheritors will value them. In this way, you will assure that your possessions are divided fairly among your loved ones.

2. Account for your family’s needs

When you are informed of what is in your estate, you will consider how to protect your assets and your family in your absence.

If you are married and your current lifestyle needs dual income, having life insurance is very important. It will be even more important in case you have kids with functional needs or college tuition bills.

While writing your will, name a guardian and a backup guardian (just in case) for your children. It helps escape from expensive family court fights.

Write your wishes for your kids’ care. Do not assume that your family members will care about your children or raise them according to your ideas and goals. In case the issue goes to court the judge will not abide by your wishes.

This post contains affiliate links. Please please read my Disclaimer for more information

3. Establish your directives

A trust can be appropriate. You can determine parts of your estate to go toward specific things while you are alive. Your selected trustee can take over, in case you become ill or incapacitated. After your death, the trust properties transfer to your designated beneficiaries.

In case you become unable to decide on your medical care, a medical care directive, also called a living will explain your wishes for medical care. Regarding your health care, you can also give a trusted person the authority to make decisions in case you cannot. These two documents sometimes merged into one, named advance health care directive.

If you are medically unable to manage your financial affairs, a durable financial power of attorney enables someone else to do so. If you cannot act in legal and financial situations, your designated agent, as directed in the document can act on behalf of you. These acts include paying your taxes and bills and also accessing and managing your assets.

If the idea of turning over everything to someone else worries you, a limited power of attorney can be useful. This legal document imposes limits on the powers of your selected representative.

Attention about who you give power of attorney. They will actually have your financial well-being in their hands.

4. Review your beneficiaries

Check out insurance and retirement accounts. Insurance products and retirement plans generally have beneficiary designations that you should follow and update as needed.

Assure the right persons receive your assets. Sometimes people forget the beneficiaries they names on policies or accounts established years ago. For instance, if your ex-spouse is yet a beneficiary on your life insurance policy, it would be bad news for your current spouse.

Do not remain any beneficiary sections empty. If so, when an account goes through probate, it can be divided according to the state’s regulation for whom gets the property.

Define persons as contingent beneficiaries. These possible beneficiaries are very important if your primary beneficiary passes away before you do and you forget to update the primary beneficiary designation.

5. Weigh the value of expert help

You need whether hire an estate tax or attorney expert to assist build your estate plan.

In case your estate is small and your wishes are simple, an online will-writing program could be adequate for your requirements.

It can be valuable to consult an estate attorney and a tax advisor if possible, in case you have doubts about the process. They can guide you to the proper estate planning path, specifically in the state with estate or inheritance taxes.

For the complicated implications like a large and complex estate includes business issues, special child care, or non-familial heirs, an estate attorney and tax professional can help.

6. Plan to reassess

Once your circumstances change, revisit your estate plan. No matter these changes are bad or good they can be including the birth of a child, marriage or divorce, perish of a loved one or getting a new job.

Considering that laws may have changed, you need to revisit your estate plan periodically, even in non-changed circumstances.

Never drafting a plan at all, this is the biggest mistake in estate planning.

Conclusion

Making delays in estate planning can be very harmful. Although no one likes to think about dying, no planning and not being prepared can cause family disputes, assets getting into the wrong hands, long legal disputes, and extra money paid in estate taxes. So set a time to get started.

“If you have any feedback about the estate planning checklist that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

While managing your finance, compound interest is one of the most important concepts to understand. Compound interest on your savings will help you earn more returns, but on a loan, it will work against you!

What is compound interest?

First, you all maybe knew that interest means the money earned on money you saved or invested.

Compounding interest is the process of growing your savings. It has the ‘snowball effect’ and means something can build upon itself. Compound interest refers to the interest earned on money that was previously earned as interest. This cycle caused increasing interest and account balances at an increasing rate, which is also called ‘exponential growth.’ It is a good way to put your money to work overtime.

How does compound interest work?

To understand compound interest let’s start with the simple interest: you deposit money in the bank, and it returns you interest on your primary deposit.

In the case of 5% annual interest, you will gain a $5 on $100 deposit after one year. So, what will happen in the next years? Here is the compound interest that comes in. you will get interested in your primary deposit, and will also get interested in the interest you just receive.

Accordingly, you will receive more interest in the second year compared with the first year, since your account balance is now $105, not $100. Although you did not increase your initial deposit, your earnings will accelerate.

First-year: A primary deposit of $100 receives 5% interest, or $5, increasing your balance to $105.

Second-year: Your $105 receives 5% interest, or $5.25, increasing your balance to $110.25.

Third-year: Your $110.25 receives 5% interest, or $5.51, increasing your balance to $115.76.

It was an example of interest compounded yearly. Interest at many banks, especially the online ones, compound daily and get added to your initial deposit monthly; therefore the process goes ahead even faster.

This post contains affiliate links. Please please read my Disclaimer for more information

Take advantage of compound interest

Do you want to be sure if compounding works out in your favor?

• Save early and often. Time is the friend of compounding interest. Since the compound interest grows exponentially over time, the longer you do not touch your money in a saving account, the greater it can grow. If you add a $100 deposit per month at 5% interest (compounded monthly) for five years, you will have $6,000 deposits, plus received $800.61 in interest. Even if you do not add up any money to your deposit after that, your account will receive an additional $7,573.87 in interest after 20 years. This will be more than your primary $6,000 due to compounding.
• To see the true annual rate of compounding, you can check out the APY (annual percentage yield). Banks usually publicize the APY, so you can easily find it. If you have an extremely large account balance you should try to get decent rates on your savings.
• Pay debts quickly and pay extra if you can. Paying the minimum on your credit cards will cost you too much since you will hardly reduce the interest charges and your balance can grow. If you have student loans, prevent adding unpaid interest charges to the balance total and try to pay the interest as it accrues. This way you will not be caught off guard when graduating.
• Keep borrowing rates low. The interest rates on your loans, besides that impact your monthly payment also will determine how quickly your debt grows. See if it is possible to merge debts and lower your interest rates when you pay off debt.

What makes compound interest powerful?

When interest is paid repeatedly, compounding happens. The first one or two years are not very impressive, but compounding starts to improve after the interests add up over and over.

Frequency: The frequency is very important in compound interest. More frequent periods such as daily, have more surprising results. Look for daily compounding while opening a saving account. Although you see the interests add to your deposit monthly, it calculates daily. There are also accounts with monthly or annually calculating interest.

Time: Compounding is more surprising over a long time. If you left your deposit for a long time to grow, you will earn higher calculated interest.

Interest rate: One of the significant factors in your account balance over time is the interest rate. Your account will grow faster in case of having higher rates. An account with compounding but a lower interest rate, especially over a long time, can end up with a higher balance compare with a simple account.

Deposits: Withdrawals and deposits also impact your account balance. Leave your money alone to grow or add a new amount of money to your initial deposit regularly works best. If you withdraw your interests, you will decrease the effect of compounding.

Compound interest works both ways. It can make you, and it can break you. If you owe money, the compound interest on your debt can ruin you. As a result, many people keep paying the bill with high interest. Despite numerous payments, the balance of the bill barely goes down because high interest on the balance continues to compound. Sometimes, it feels as if it’s important to pay the balance off.

Conclusion

The power of compound interest can be hard to understand. This article provides you with a few situations to show the impact compound interest can have over time. Set a time sooner to open a saving account with compound interest, and then you will have more time for compound interest to work in your favor.

“If you have any feedback about how does compound interest works that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Money is among the biggest things that people worldwide are worrying about, even more than their health, families, or jobs. It has been said often that money is the ticket to happiness. Human binges mind always seek pleasure and avoid pain. It is a common belief among people that if they have money, they will be happy; otherwise, they will be miserable. Therefore the reason people worry is that they believe money can help them get more pleasure and prevent them from pain. In case people have worried for a long time, this thought will change into a habit, and eventually, they will feel anxious more often in their life.

How worrying about money can affect your life?

It is worth mentioning that many around the world scared of losing their jobs during the COVID-19 pandemic, falling into uncertainty about their future savings and economic situation. They are worried about what would happen to them, especially after getting too much news. In such a situation people start asking, “what if?” And as you may know, what-if scenarios can get out of control fast. The fact is, they may happen all the time in everyday life-not just during a pandemic.

Being worry about money also can affect relationships. It would be specifically damaging in marriage. It is difficult for couples to be empathetic, supportive, or even romantic when they are worried about money. While emotions are getting pale and the financing issues are getting too much, one of the couples might say something less kind than usual. That is why money is a leading cause of divorce for decades.

In another situation, the topic of money turns into fights for couples and it prepares them for financial infidelity. It tempted them to hide their spending rather than engage in the conversation and make purchasing decisions together.

Many physical health problems are leading by money stress. Worrying about money can cause diabetes, cardiovascular disease, migraines, sleep problems, and more issues than you realize. And worst is when people postpone going to the doctor because of the expense.

Today, the younger generation is also suffering from anxiety and depression; and that is because they are trapped into debt at a young age. There is always something they can do to change the situation of their life and stop worrying about money.

How to stop worrying about money

Here are the steps that will help you overcome financial anxiety and stop worrying about money:

This post contains affiliate links. Please please read my Disclaimer for more information

1. Master your life

By deciding to read this article, you simply take the first step. So you want to master your life and do not want to be a victim of your circumstances anymore. Now you are planning to learn something to make your life better and stop worrying about money.

The thought of victimization is widespread in our society. People wrongly have thought that they have no control over their lives and what happens to them. The fact is that your environment, your mind, and your beliefs are what build your reality. Your mind generates coherence between your mind and your reality.

To stop worrying about the money you should first take back control of your situation. Regardless of the occurrences in your external world, how you feel it inside your mind causes your outcome. If you see what happens as something that you cannot control, then you are a victim of your circumstance. In case that the external happening is not mattered for you, you are the master and creator of your life.

2. Accept the current reality

Decrease the tension between your current reality and how you tend it was different. While arguing with your reality, you feel tension and frustration. People wish things were different, and this makes them suffer. They ask themselves why those things are happening to them. When you stop opposing your reality, no more questioning about why this is happening to you, or wishing life was different, your mind can eventually become completely clear.

When you accept your current reality, actions become fearless and simple.

3. Make a plan

A plan can assist you to control what you can, and that is your money. Your plan can be everything from working to get out of debt or save an emergency fund, to your monthly budget, or a long-term investment plan for your retirement.

Here is an example of debt snowball:

Let’s start with the number of debts you have. Write down all your debts from the smallest to the largest. Pay more on your smallest debt. In this way, you can get rid of them sooner than usual. When your smallest debt is gone, focus on the second smallest debt and then the third-smallest one. The more you pay off, the more you get free.

3. Be aware of your weaknesses

Having a plan is the key to stop worrying about money. But, exactly when you think that you finally manage your finances, something happens that will seduce you to return to old habits. You are thinking of a new transmission for your car and you want to pay for it by credit card. You have been invited to a vacation, and you wish to reach your hands on your emergency fund. You are going to take out a Parent Plus loan to send your kids to college.

That is because being aware of your weakness is so crucial. Do not dwell on them, just know that what they are become it easier to stop a bad habit at the right time.

Conclusion

Remember that worrying about money is just a waste of time.

By reading this article you may prepare yourself to stop worrying about money, stressing, and losing sleep. We recommend you to read more about how to stop worrying about money and teach yourself how to overcome frustration and stress on money by reading relevant books, blogs and using experts’ advice.

“If you have any feedback about how to stop worrying about money, that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

Being financially intelligent means knowing how to manage, save, and invest money efficiently for you and your family. It contains different things like budgeting, investments, getting out of debt, real estate, insurance, college, and retirement planning. Financial intelligence is a subject that matters to almost anyone. Unfortunately, people are not learning enough about it. Without adequate financial education, peoples are unable to save for retirement, buy homes, or pay for unexpected expenses like car repairs.

What is financial intelligence?

Financial intelligence means having a basic understanding of issues related to money and finance, particularly someone’s finances. When you are financially literate, you will be able to:

• Pay your household bills
• Build a household budget
• Calculate how much you are paying for credit cards
• Open a bank account and keep track of your balance to prevent overdraft fees
• Check your credit score and take action to enhance it
• File an income tax return
• Open an account to save for college
• Figure out your net worth
• Shop for a mortgage loan
• Invest in a retirement plan
• Protect your personal information
• Spot a financial scam

Sadly, many people cannot meet this standard. Researches have shown that a majority of people worldwide lack the knowledge necessary to make routine financial decisions. Surely, it takes time and effort to improve your financial intelligence. However, when you invest in yourself, you begin investing in a better future.

Some good habits to enhance financial intelligence

• Concentrate on saving

Saving money is a great habit for people with high financial intelligence. Regardless of the amount of your income, become it into a habit to put aside part of your earnings each month. Put some money aside, it is crucial for your life since it encourages you to spend cautiously and also assists you to create a fund for emergencies. You will be able to fund your short and long-term goals with your savings, it prevents you to burden yourself with a loan or cut down your regular expenses.

• Assess your spending

Do you feel your money is slipping through your hands? It is time to check out where all this money is spending. The first step is making a daily, weekly, or monthly basis listing habit to put all your expenses on the list.

It will help you manage your finances better by assisting you to keep track of the expenses which are significant or not. Also, you can write a personal journal or diary to follow your daily expenses in case you have difficulty remembering where you spent your money.

This post contains affiliate links. Please please read my Disclaimer for more information

Make a scheme of your buying

Many people wish to buy some commodities that are more expensive than they can afford. This may be a new car, a new cellphone, furniture for the garden, jewelry; there is no end to the luxuries people wish. Although, you might want to get these immediately, a sign of financial intelligence is planning your buying and purchasing them after saving adequate money. In this way, you can prevent yourself from impulsive shopping, and in case you want to purchase something that falls outside of your budget, save up and then buy it.

• Invest

Investing money is also a great habit besides that saving. By investing, you will be able to multiply your money, whether for the fulfillment of short-term goals or retirement planning. To invest money you can find various options around like real estate, currency, share market, fixed deposits, etc. To make good and steady returns while investing money, make sure you research enough on various aspects of the market you intend to dive into.

• Limit your credit card spending

In case you want to create and improve your credit score, having a credit card is good. But, when you plan to enhance your financial intelligence, we recommend you cut down the number of credit cards you have and use. When people own too many cards, they often lose track of all their spending. The figure that will be presented at the end of the cycle may through your whole budget off balance. If you continue this behavior, it would impact your financial stability in the long run.

• Take a loan only on necessary occasions

Today, because of the easy accessibility of loans, people can buy even luxury goods easily. Such a shopping behavior in long term would severely impact your financial health.

Only when there is an absolute need for a loan, consider taking it, and remember that your income must be adequate to manage the pressure of monthly installments.

• Read about personal finance

You can learn much more from a good book than personal experience after you have made mistakes. Great books from great authors are including Robert Kiyosaki’s “Rich Dad, Poor Dad”, Dave Ramsey’s “The Total Money Makeover”, David Bach’s “The Automatic Millionaire”, Beth Kobliner “Get a Financial Life”.

By reading these books you can improve your financial intelligence and also bring many common doubts about personal finance to the light. We also suggest you spend time reading blogs, articles, and magazines about personal finance and budgeting; they can give you the right tips and tricks for handling your finances the right way regularly.

Conclusion

Doing everything good seems intimidating at first!

You may not financially literate at school, but you can learn it. It requires spending some time and effort to peace financially. When you start performing healthy financial habits regularly you will be able to cope with all your financial goals.

We recommend you some “do’s” and “do not’s” to remember while embarking on your finance journey.

Do:

• Utilize the entire financial resources that are available
• Keep learning through taking classes and professional financial advisers
• Start budgeting and follow it

Do not:

• Fear! You need to start from a point, and over time your finance will be stable.
• Do it alone. You can find many people including experts and advisers willing to help you.
• Limit your chances. Explore various skills and certifications to increase your job opportunities.

“If you have any feedback about how to grow your financial intelligence that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

While wedding costs are getting more and more expensive, no one cares about how much does it cost for guests to be only a part of this ceremony. Attending a wedding is not cheap! At the same time, you might be excited to celebrate a loved one’s big day you also might be worried about the expenses a wedding burden on you. By reading the current article you will learn some tips and tricks to help you to attend a wedding on a budget.

Budgeting for Weddings

Prior to making a plan on how to save money on the weddings, you will attend, you should know how much to save. Consider your budget; is there some extra money that you can put aside for wedding expenses? If no, you may have to change a bit your spending habits to afford to attend those weddings.

In case you do not have a budget, it is a good time to make one. Start following your income and your expenses, check how this two compare, is there any remaining to put aside? How much? Chose the amount you can work with, and stick to it. Arrange it in an individual account or your general saving account, check out how much you gather to spend.

Reducing Expenses of Wedding Essentials

1. Outfit

For men, there might be fewer worries about what they wear and how much it will cost them. They can wear one single suit or tuxedo at every wedding, and no one would even notice.

But for women, the story is different, although, it really does not have to be. If you have to attend more than one wedding at a certain time like summer, as a woman you can dress simple. Let’s make it clearer, chose a stylish but basic dress in black or navy blue (neutral hue in other words) and work on your accessories.

You can wear a large statement necklace with a black cocktail dress to a wedding, and wear the same dress with a sash as well as a pair of glittering earrings to another wedding and attendees will think it is a different dress. Instead of purchasing multiple dresses, that cost you too much, you will get one single dress and use it in the wedding after the wedding without anyone noticing the difference. You can apply the same trick to your shoes. Buy a pair of pumps or strappy sandals and use them during the wedding season.

In case you have invited just to one wedding in the season, consider renting a dress. Renting a dress is the most economical way. You do not have to spend several hundred dollars to buy a dress, and instead, you only need to pay $35 to $50 to rent one. If you are living close to a dress rental service, by chance, you can try on items before you rent.

There is more than a dress to rent from a rental service. In case you wish to replace your accessories from wedding to wedding and do not like to have a drawer stuffed with necklaces and earrings, you can rent those at a cheaper price. Based on the materials used, designer, and style, necklace rentals begin from $10, and purse rentals begin from $30 at rental services.

2. The Gift

Purchasing a gift is also a part of going to a wedding. There is no restricting rule on the amount of money you should spend on the gift, regarding how much you can afford.

You can buy something that seems you broke the bank on it while protecting your budget. The online promo code can help you with that, specifically when your friend registered at places that often use them.

This post contains affiliate links. Please please read my Disclaimer for more information

You do not have to provide the gift from the retailer the couples are registered with. Amazon is a website example that allows you to buy the gift elsewhere and check it off the registry, to prevent duplicates. Try to get your gift sooner. If you wait until the month before the wedding, you will see just the priciest gifts remaining.

There are also other options to save on the wedding gifts:

• Share buying the gift with a friend. A $120 gift will cost you $60 if you split the cost with a friend.
• If you are talented and trained on how to decorate flowers or cake, then offer your services to the couple. If you are excel at the service you offer you will save money and so they will.
• Do something creative. A heartfelt gift is sometimes more valuable than anything on the registry. A photo book full of the couple’s picture together can be a great gift.

3. Transportation

Based on how far the wedding is from your place, travel can be your concern of expense. How you get there affects how much you spend. For instance, a fly from New York to Philadelphia costs around $150, while taking the bus will cost you $5. Getting to and from the airport is also time-consuming.

Pick the best day for travel also can aid reduce your expenses. Renting a car will be cheaper on the weekend rather than on weekdays. Since car rental companies target business customers, rather than leisure travelers, they have more cars to rent during the weekend.

Fridays and Sundays are the most expensive days for flying, in case you consider taking a plane.

4. Lodging

If you do not have any close relatives or friends to stay with, you have to stay in a hotel. Bride and groom usually reserve several rooms at a discounted rate at specific hotels. If you are included in such action, go ahead. But remember that if you search more you can save more. A bit less luxurious hotel may provide you with a price even cheaper than the discounted one.

Other than the hotel, you may find a private room for a great price. You can even search for a house to rent if you travel in a big group or with your family. There are certain websites for that.

Conclusion

If you invited to a couple of wedding ceremonies this season, you do not have to spend too much that ended you up with regret on your financial decisions. Set a list of fixed numbers before you start to make any plans. Before you attend a wedding you should know how much you can spend on your clothes, the gift, and traveling.

Be sure to make a plan before you attend a wedding.

“If you have any feedback about how to attend a wedding on a budget, that you have tried out, or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.

A health savings account is a kind of tax-free savings account that you can use to save on medical expenses when enrolling in a high-cost, affordable health care plan. If you have an HSA and have just moved from a job, this article provides helpful tips on what happens to the HSA when you leave work. And even if you do not intend to change jobs at the moment, it is still a good idea to read this article. Because if you have HSA, it is better to know your options ahead of time if you are in a condition where you need to change or quit for any reason.

The HSA has long been one of the most powerful savings accounts authorized by the federal government. Health savings accounts have many advantages and can save health care costs and even retirement for you. If you can wait until age 65 to use the money saved in the HSA, you can even use it as a retirement account instead of a health savings account.

A health savings account helps you pay for medical expenses that your insurance policy does not cover. Besides helping you save money for out-of-pocket expenses that health insurance will not pay for, HSAs offer other benefits.

What happens to your HSA if you quit your job?

The funds in your HSA are always at your disposal, regardless of employment status or insurance coverage. The fact that HSA funds are always given to you is another important advantage of this type of account. Unlike Flexible Expense Accounts (FSAs), savings on HSA accounts do not have a specific date. This means that if you change your job or health plan, you can maintain your HSA and spend your budget normally on eligible medical expenses or see it grow until retirement. (As long as you are ready to use your cash any way you want). You can also help your account as long as you comply with IRS eligibility rules.

Benefits of HSA when changing jobs:

• The HSA acts as a savings account:

Many consumers are unaware that, in addition to accumulating various tax benefits, many HSA accounts allow you to invest your capital like pension funds. You can keep your Health Savings Account (HSA) when you leave your job. Even if you open your HSA in connection with a high deductible health plan (HDHP); All the money in it, including your employer’s contributions, your contributions, and interest or investment growth, will be given to you.

This post contains affiliate links. Please please read my Disclaimer for more information.

• Pay COBRA monthly premiums using HSA:

If you lose your health insurance due to leaving your job, you can use the money in the HSA to pay your monthly COBRA premium. This is an eligible medical expense, so you will not have to pay income tax on withdrawals.

• Use your HSA as an emergency fund:

Some people consider their HSA as an emergency fund and invest their HSA funds in stocks, bonds, or interest-bearing accounts. You can use the money of your HSA to pay for medical expenses. But some people allow the profits from these investments to grow for years without tax. These people pay their medical bills with other money, and they save these receipts for medical expenses paid from other funds. When they need money in the future, they can get it back from your out-of-pocket medical expenses for the duration of the HSA. Withdrawn funds are not taxable, as they can be used to reimburse you for any medical expenses you have already incurred.

• HSA for retirees:

When you turn 65, you may withdraw money from your HSA for any reason without incurring a 20% non-medical withdrawal penalty. However, the only money you receive for eligible medical expenses is tax-free. Note that you can always use your HSA budget to pay for your spouse’s treatment.

HSA and its relationship with the employer:

If you have an employer participating in your HSA, these benefits also belong to you, but they do not happen again after leaving your job. Your employer cannot withdraw any of your benefits, and all of your HSA costs are for your maintenance and use. If your employer pays some or all of the monthly management costs to your account, you will be responsible for those costs. HealthEquity will email you if your dependency changes, including information about these costs, as well as suggestions for preventing or reducing them.

While you are preparing to leave your job for a new job, freelancer, or any other purpose, it may be wise to compare health savings accounts and their offers, so you can move on to a new account. You may want to transfer your existing HSA funds to your new HSA. Under these circumstances, you can still keep your existing HSA open and intact and open a new account with your new employer to enjoy the benefits of employer-backed HSA. Note that just because your employer offers an HSA health care plan does not mean that the HSA is better.

There are no rules for having multiple HSAs. The only thing to keep in mind about multiple HSAs is that the total participation fee for all of your HSAs should not exceed the maximum annual IRS contribution for your specific circumstances.

Conclusion

Today Many employers offer HAS accounts to employees. This type of account provides a tax-free contribution to cover medical expenses. As we explained in this article, if you leave your job, you can keep your funds in the HSA. One of the main benefits of HSA is that it only belongs to you. The HSA belongs to you, and you can retain, terminate, resign, relocate or retire. You can keep a health savings account and all the money in it, including your employer’s assistance.

If you receive unemployment advantages, you can use your HSA to pay for long-term care, COBRA premiums, or other health insurance premiums. We hope by reading this article, you are aware of the countless benefits of HSA (even after leaving the job). If you have experience using this type of account, share it with us.

“If you have any feedback about what happens to my HSA when I leave my job that you have tried out or any questions about the ones that I have recommended, please leave your comments below!”

NB: The purpose of this website is to provide a general understanding of personal finance, basic financial concepts, and information. It’s not intended to advise on tax, insurance, investment, or any product and service. Since each of us has our own unique situation, you should have all the appropriate information to understand and make the right decision to fit with your needs and your financial goals. I hope that you will succeed in building your financial future.